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14. The following table is a brief version of a company's income statement. The cost of goods sold is 50% of the net revenue and
14. The following table is a brief version of a company's income statement. The cost of goods sold is 50% of the net revenue and the general and administrative expenses are 40% of the net revenue. The company has the option of either reducing the spending (COGS) by 10% or increasing the sales (net revenue) by 10%. Net Revenue Cost of Goods Sold General and Administrative Expenses Earnings before Interest and Taxes $2,000 $1000 $800 $200 (a) (1 PT) Consider the case where the company chooses to reduce the cost of goods sold by 10% with the net revenue and general and administrative expenses remain unchanged. Fill out the following table. $2,000 Net Revenue Cost of Goods Sold General and Administrative Expenses Earnings before Interest and Taxes $800 (b) 1 PT] Consider the case where the company chooses to increase the sales (net revenue) by 10%. Fill out the following table. Net Revenue Cost of Goods Sold General and Administrative Expenses Earnings before Interest and Taxes (c) (1 PT) Which option should the company choose in order to maximize the earnings before interest and taxes? Reduce the COGS by 10% or increase the sales by 10%
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